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'New normal' opens new opportunity for Asia-Pacific development

2015-03-27 13:11 Xinhua Web Editor: Gu Liping

China's "new normal," which is widely deemed as a courageous step for Chinese government to rebalance it's economy, will bring benefits to countries in the Asia-Pacific region that have close economic ties with China.

Few people would doubt that one of the most eye-catching topics on the Boao Forum for Asia kicked off on Thursday will be China's "new normal" policy which sets a decades-low economic growth target and heralds a new round of profound and comprehensive reforms for the world's second largest economy.[Special coverage]

While the "new normal" is a voluntary policy remaking carried out by China in order to enhance a consumption-oriented and innovation-driven economy and to steer the country away from the path of resource depletion, environmental damage as well as the "middle-income trap," such moves can also open a window of opportunity for other Asia-Pacific countries.

First, the "new normal" can bring benefits to the region's commodities market in a new style.

Some would argue that being the world's biggest consumer of commodities, China's decision to cool down fixed investment will lead to a surplus in worldwide commodities market.

That is partially true. Now as China embarks on a new mode of development, its demand for raw materials is bound to drop, and the so-called early-cycle commodities such as coal, iron ore, copper will be greatly effected.

But as the country upgrades its industries, the demand for other commodities will increase, such as high-grade food, gold, palladium, nickel and zinc, which are used in cars and household goods instead of infrastructure construction.

These commodities are with higher added value, and also impose less pressure on the environment. So countries in the region that provide such commodities will get higher profits.

Second, while Beijing is rebalancing its industrial structure and redirecting its surplus industrial capacity, countries in the Asia-Pacific can get more investment from China.

With the launching of the "Belt and Road" initiatives aiming to improve connectivity in relevant regions, more and more countries, especially developing countries, begin to notice that China has the ability and the will to participate in infrastructure construction in the regions.

Third, China's aspiration to embrace an innovation-driven economy can bring more opportunities and benefits for Asia-Pacific countries.

China has implemented measures to bolster the free movement of talent, capital and technologies, and has also promised to step up intellectual property right protection and further open up industries to competition.

This is good news for all innovative companies in the Asia-Pacific region, because Beijing's measures can facilitate their profitable business in an enormous market.

In addition, given China's large reserves of talent, the country's innovation will eventually boost economies of the region, even the world, in a more powerful way.

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